Mitsubishi to ice the cake of Indian small car market

In another 3-4 years, Mitsubishi would have made a deep impact in the Indian car market with its compact hatchback. The company has made a firm decision to penetrate the Indian car market which hast he potential of 1.2million annual units. The company has not made any deep impression, even after its presence for a decade, in the small car segment. Mitsubishi is strong in premium SUV and upper mid-sized sedan segment.

The proposed car is already on the design process ready for Thai market and will be on the lines of eco-friendly norms promoted by the Thai government. Thai government’s Board of Investment of Thailand is funding this eco-car project at Rs1100 crore(8 billion Baht). The condition stipulated by the Thai government was that the plant should have the minimum production capacity of 1 lakh annual units. Mitsubishi is the fourth Japanese car maker, after Nissan (who first came out with the eco car called March). This March is Mirca in India.The advantage for the eco-carmakers is that they avail marginal tax reductions for a minimum period of 5 years on condition that they roll out 1 lakh annual units. Compliance of Euro IV norms is one more factor for these eco-car makers.

Mitsubishi is in a tie-up with the Indian Hindustan Motors but the small car would be first rolled down in Thai in 2012. Initially the car will have the proficiency of 1.3 lit petrol sports engine and it will be redesigned to match the Indian conditions. It is to be reminded that the Indian government has given a relaxation in excise duty for cars with less than 4 metres length and 1.2 lit petrol/ 1.5 lit diesel engines. The project was dampened last year due to the financial instability and the earlier project of a small car for the launch in 2011-12 too went awry. Originally, the company had proposed to invest additional amount at the Chennai plant to increase the production from 10000 units to 12000 units per year. India was supposed to have been the platform for the world car in small car segment. Mitsubishi’s current models are Pajero, Outlander, Montero, Lancer and Cedia at the price range of Rs7.75 lakh –Rs38 lakhs.

Toyota to make its presence in diesel version small cars

The JV Toyota Kirloskar motor is delivering a diesel version of Etios [images], so only to insist its marked presence in the small car segment in India. The result is the outcome of stupendous enquiries for the diesel version poured at the Delhi Auto Expo this year beginning. However, a final word is yet to be made, said the company’s Deputy MD. With Etios, the company wants to make a breakthrough in the small car segment. The commercial production will commence from December 2010 at its Bangalore plant so as to make the formal launch in the Q1 of 2011. There will be two variants – a hatch back with 1.2 lit petrol engine and a sedan with 1.5 lit petrol engine.

Though the price is yet to be finalized (the approximate price is in the range of Rs4 lakhs for hatchback and Rs6.75 lakh for sedan,) the position of the car (hatchback) will be on the lines of Maruti Swift [images], Hyundai i20 petrol [images], VW Polo [images] and the sedan will be the counterpart of Maruti D’zire [images] and Tata Manza [images]. There will be 70% localization of the car in terms of components. While the engine will be imported from Japan, the Bangalore unit ( at an annual capacity of 75000) will exclusively make this Etios, at an investment of Rs3000 crore. The annual capacity will be 70000 units and the similar number of cars will be rolled down in the first 12 months. In the meantime, there will be a focus on the export market. To meet the customer service well, the dealer network is to be expanded- 150 dealers from the existing 98.

Porsche suffers recall fever for its Panameras

The high profile carmaker Porsche suffered a setback when it has to recall its Panameras [images]. The car set to roll down months ago and follows suit on the lines of Toyota. Actually Porsche relied much on this Panamera, expected to be the bread winner in terms of net sales. It was supposed to be the crowd puller to counter Maserati Quattroporte or Mercedes-Benz CLS [images]. Of late, Porsche has been receiving accolades for its products from , especially from J.D. Power. The flaw in all the 11300 units of Panameras is with the seat belt tensioners. Porsche SE holding SE has 51% from Porsche AG with the remaining hold by VW. It is to be seen how VW might react to the situation in the midst of the common CEO claiming that the company believes in better quality and relaxed autonomy. The reputation of VW is in trouble since it supplies painted bodies for Panameras from its Leipzig plant.

Maruti to invest Rs6000 crore for additional production

In order to meet the demand for its range of cars, three of them have a long wait of six months, Maruti Suzuki has to shell out Rs6000 crore for expanding its plants. By this the company is likely to increase the production, said its executive officer. Swift, for which the wait period is longer than for other cars, is to be increased to 12000 units a month to reduce the waiting period considerably. The ratio of production in terms of Eeco is to be double than that of the current, he further added. Without increasing the shifts, to third one, the company is confident of delivering the required amount of vehicles – 1.2 million per year.

The increased production at Manesar – 250000 units- actually scheduled for 2012, is to be advanced. Gurgaon plant too would be relieved for delivering an additional 90000 units at an investment of rs140 crore. The competition is high in A2 and upper A2 segment and Maruti is to regain its supremacy in any segment. A tough time waits for the company with regard to the export volume due to the scrapping of scrappage incentive scheme in Europe. On parallel, the company is facing a fall in its margin – 170 basis points on every quarter period. This is chiefly due to the high increase in raw material costs, depreciation of the Euro and the mix adopted in the models.(Maruti to increase its production)

Taking all extremes with care, the company would think of revising the price at appropriate time. The company has to shell out royalty payment for the new arrivals. There is an increase of royalty oriented vehicles – 86% – in all its portfolio during the FY 10(which was 81% in the previous FY). Maruti is quite happy over its penetration into rural segment and government employees. In all the sale of cars in rural sector accounted to 18% and to the government employees 13%. Maruti has a strong network of sale – 802 retail outlets spread in 555 cities along with 2740 service outlets in 1335 cities.

M&M is on the verge of new overseas project

The failure in acquiring Land Rover has not spared M&M to leave any void and the time has now come for exploring new ventures. One such attempt is to negotiate with Korea’s Ssangyong Motor Co, which is on the sailing nail. However, the information is negated by both the companies as the M&M’s President for Automotive claimed that there is no such proposal. Similar comment came from the managerial official of Ssangyaong. Since January 2009, Ssangyong is in the blues and has been searching for right investors to retrieve its loss to the tune of $75.42 million.

The company is since on the Rehabilitation Plan, which was upheld by the South Korean court. The court had to intervene as the proposal was opposed by the Chinese company SAIC which has a stake of 11.5%. Ssangyong is waiting for the court verdict in this regard to go ahead with M&A process, said director of KPMG Advisory. However, the company is willing to receive any investment proposal from M&M, he added, as one among the bidders. Ssangyong has not yet received any written proposal for this investment from M&M.

Ssangyong’s range of sports cars include Rexton II, New Kryon, Actyon Sports, Rodius and the sedan Chairman W. in addition there are commercial cars to its credit. Even if M&M intends to enter into a business deal with Ssangyong it will be for Rexton, said the then executive director of M&M. a confusing statement came from the Chief Operating Officer of M&M that there is no such proposal to enter into Ssangyong project. The constraint regarding the investment in Ssangyong is furthered by the concept of militant union prevailing in the company. Based on this concept Tata Motors gave up its attempt ten years ago. M&M’s clear picture in the Ssangyong would come to light as in the case of its interest in Sonalika Tractors and Reva electric vehicles.

Test drive from Nissan for its export cars

The test drive has at last commenced by Nissan for its export models to Europe and six cars have already been dispatched to Barcelona from its Chennai plant. This firs consignment will reach the destination in a time span of 22 days, said the company’s MD and CEO. The full fledged export would commence from the second half of 2010, he added, while the Micra domestic production would be designed from next month. The export of this Micra [images] would take place in July and entire car ranges will be exported to Europe, Middle East and Africa which would constitute 100 countries. The company foresees the volume of export, by 2011, to be 1.10 lakh units. The export cars will be packed in pure car carrier vessel by the company, to be dispatched from the Ennore port, under an MoU for exporting the cars. The port is expected to finish the berth space in another two months. (Nissan To Launch 9 Models)

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Yamaha introduces new colours for FZ-16 and FZ-S

The fate of Indian motorcycle industry is ridiculous! While customers complain of boring sticker jobs and 3D logos, Yamaha has joined the bandwagon. Yamaha has introduced two new colours for FZ-16 and FZ-S and calling it as a makeover. FZ-S will be available in Black Cyber Green, Silver Tech and Sport Electric Blue colors while FZ16 will come in Lava Red and Midnight Black. The FZ-S will be available at a price of Rs. 67,000/- while FZ16 is priced at Rs. 65,000/- (Ex-showroom, Delhi).

Pictures Of FZ-16 and FZ-s

Ad propagation under scrutiny

The automobile industries in India are in the lurch to undergo the scrutiny by the governing body of the advertising industry, Advertising Standards Council of India. The body has since received complaints regarding the ads displayed for Maruti SX4 [images] and M&M’s scooter Flyte [images]. The body has instructed the companies to alter the ads in abeyance with the norms. . The Consumer Complaints Cell of ASCI felt that the ad displays unethical and unlawful drive ignoring the traffic rules. Both Maruti Suzuki and M&M have come out with convincing views of which the latter explained the ad relating to the popular movie 3 idiots. Both companies have affirmed to give due weightage for the safety norms. These two ads are among the six which came for scrutiny from the ASCI.